Ingredients for Success

The state-of-the-art Fallon plant, which began processing milk in April 2014, manufactures milk powder for overseas shipment and U.S. customers desiring high-quality dairy protein. The plant is the first that DFA built from the ground up, and it was designed specifically to meet global customers’ demands, with the capacity to process 2 million pounds of raw milk daily.

In addition to Fallon, three other plants commonly produce ingredients for export: Portales, N.M., Hughson, Calif., and Fort Morgan, Colo. Together, the four plants supply NFDM, WMP and skim milk powder to customers throughout North America, Latin America, Asia, the Middle East, North Africa and Australia, says Michael Lichte, vice president of dairy marketing and business planning.

Lichte says the markets change rapidly, but generally, Latin America and the Asia-Pacific region, which includes China, the Philippines, Taiwan, Vietnam, Indonesia, Malaysia, Singapore and Australia, are the leading markets for export sales.

“There’s a huge market out there for milk powders,” Lichte says. “And we produce more than we can use domestically. So if we didn’t export it, we’d have a problem.”

Each year, Lichte says the United States produces a total of about 1 million metric tons of NFDM. In contrast, the United States only consumes 410,000 metric tons. As a result, a significant percentage of U.S. milk powder — including the powder ingredients produced by DFA — is exported to foreign markets, where demand continues to grow.

The trend in rising global demand for U.S. dairy products like milk powder isn’t expected to change anytime soon.

“Global export sales have grown to encompass 12 to 15 percent of total annual milk production in the U.S.,” Wietharn says. “In just a few years, it could approach 20 percent. So that’s a huge demand in global markets for high-quality dairy protein, and the most effective way for us to ship it overseas is in dry powder form.”

Wietharn says the ingredients division will continue to pursue these global opportunities, but the future also holds some opportunities to continue improving existing processes and markets.

“We’re going to continue to look at new opportunities for additional plants in strategic locations, where there’s a need based on dairy production and where dairy farmers are growing,” he says. “Our other focus will be a continuation of raising the bar on quality, and I think you’ll see us continue to look for ways to find new markets for milk components.”

DFA’s ingredient plants

Roughly half of DFA’s facilities throughout the country are dedicated to producing ingredients, from milk powder, cream and butter to condensed milk. Our ingredient processing plants include: